EXHIBIT 10.60
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment to Second Amended and Restated Credit Agreement
(herein, the "Amendment") is made as of February 8, 2005, by and among Xxxxxx
Industrial Group, Inc., a Georgia corporation (the "Borrower"), the Lenders
party to the Credit Agreement hereinafter identified and defined, and Xxxxxx
Trust and Savings Bank, as Agent for the Lenders (in such capacity, the
"Agent").
RECITALS
A. The Lenders currently extend credit to the Borrower on the terms and
conditions set forth in that certain Second Amended and Restated Credit
Agreement dated as of March 26, 2004, as amended, by and among the Borrower, the
Guarantors, the Lenders and the Agent (the "Credit Agreement"). All capitalized
terms used herein without definition shall have the same meanings herein as such
terms have in the Credit Agreement.
B. The Borrower has requested that the Lenders amend certain provisions of
the Borrowing Base and certain financial covenants set forth in the Credit
Agreement, and the Lenders are willing to do so on the terms and conditions set
forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in, and
effective from and after the date specifically set forth in, Section 2 below,
the Credit Agreement shall be and hereby is amended as follows:
1.1. The definition of "Borrowing Base" set forth in Section 5.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
"Borrowing Base" means, as of any time it is to be determined,
the sum of:
(a) 85% of the then net book value of Eligible Accounts (computed
using the method of receivables valuation applied by the Borrower in
accordance with GAAP which reflects such value as the net book value
of its receivables, except that net book value for such purposes shall
not reflect any reserve for accounts more than ninety days past due
that have already been excluded from gross accounts in computing such
Eligible Accounts) less such other reserves for uncollectibility,
location of account debtor, contras and other matters as the Agent or
Required Lenders in good
faith shall from time to time reasonably deem appropriate to adjust
such net book value; plus
(b) the lesser of (x) $13,000,000 and (y) 60% of the value
(computed at its cost using the method of inventory valuation applied
by the Borrower in accordance with GAAP which reflects such cost on
the Borrower's books as its net book value, but in any event after
reducing such value as so computed by the aggregate amount of all
reserves for obsolescence, slow-moving items, shrinkage and all such
other matters as the Agent or Required Lenders in good faith shall
from time to time reasonably deem appropriate to adjust such net book
value) of Eligible Inventory, provided that, in no event shall the
amount computed pursuant to this clause (b) exceed 60% of the
Borrowing Base; minus
(c) a general reserve in the amount of $500,000;
provided that (A) the Borrowing Base shall be computed only as against
and on so much of the Collateral as is included on the certificates to
be furnished from time to time by the Borrower pursuant to Section
8.5(f) hereof and, if required by the Agent pursuant to any of the
terms hereof or any Collateral Document, as verified by such other
evidence required to be furnished to the Agent pursuant hereto or
pursuant to any such Collateral Document, and (B) the Agent shall have
the right to adjust the advance rates against Eligible Receivables and
Eligible Inventory based solely on the commercially reasonable
exercise of its credit judgment based on the results of any field
audit of any Collateral which reasonably supports any such adjustment
and the Agent shall notify the Borrower of any such adjustment to the
advance rates promptly following such adjustment.
Notwithstanding any other provision of this definition of "Borrowing
Base" to the contrary: (i) the amount of Eligible Accounts otherwise
included in the Borrowing Base shall be reduced, dollar for dollar, by
a reserve equal to the greater of (a) the amount (if any) by which (x)
the aggregate amount of accounts payable owing by the Borrower and its
Subsidiaries to Deere and Caterpillar together and their respective
Affiliates for inventory and supplies purchased (the
"Deere/Caterpillar Payables") at any time exceeds (y) $8,000,000 or
(b) the sum of (A) the amount (if any) by which (x) the aggregate
amount of accounts payable owing by the Borrower and its Subsidiaries
to Deere and its Affiliates for inventory and supplies purchased (the
"Deere Payables") at any time exceeds (y) $5,000,000 and (B) the
amount (if any) by which (x) the aggregate amount of accounts payable
owing by the
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Borrower and its Subsidiaries to Caterpillar and its Affiliates for
inventory and supplies purchased (the "Caterpillar Payables") at any
time exceeds (y) $4,000,000; (ii) no reserve will be imposed in
computing the Borrowing Base as of any time solely in respect of the
Deere/Caterpillar Payables, Deere Payables or Caterpillar Payables to
the extent the same do not exceed such respective limits; and (iii)
the Agent and the Required Lenders shall have the right to impose
reserves for other matters arising in connection with receivables
owing by Deere and Caterpillar and to otherwise impose reserves in
accordance with the Credit Agreement.
1.2. Section 8.10 of the Credit Agreement is hereby amended by (i) deleting
the amount "$4,800,000" for fiscal year 2004 and replacing it with the amount
"$5,400,000," and (ii) deleting the amount "$5,200,000" for fiscal year 2005 and
replacing it with the amount "$5,500,000."
1.3. Section 8.14(b) of the Credit Agreement is hereby amended by deleting
the amount "$7,800,000" for the fiscal year 2005 and replacing it with the
amount "$8,000,000."
1.4. Exhibit H to the Credit Agreement is hereby amended and restated to
read in its entirety as set forth on the revised Exhibit H attached hereto.
SECTION 2. CONDITIONS PRECEDENT.
Upon the satisfaction of all the following conditions precedent, this
Amendment shall be, and is hereby agreed to by the parties hereto to be,
effective from and after December 31, 2004:
2.1. The Borrower, the Agent, the Lenders and the Guarantors shall
have executed and delivered this Amendment.
2.2. The Agent shall have received copies (executed or certified, as
may be appropriate) of all legal documents or proceedings taken in
connection with the execution and delivery of this Amendment to the extent
the Agent or its counsel may reasonably request.
2.3. Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Agent and its counsel.
2.4. The Agent shall have received a certified copy of an amendment to
the Note Purchase Agreement increasing the capital expenditures limitation
covenant to an amount not less than $5,400,000 for fiscal year 2004 and
which shall be in form and substance acceptable to the Agent.
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SECTION 3. REPRESENTATIONS.
In order to induce the Lenders to execute and deliver this Amendment, the
Borrower hereby represents to the Lenders that as of the date hereof, and after
giving effect to this Amendment, (a) the representations and warranties set
forth in Section 6 of the Credit Agreement are and shall be and remain true and
correct in all material respects (except that for purposes of this paragraph the
representations contained in Section 6.5 shall be deemed to refer to the most
recent financial statements of the Borrower delivered to the Lenders) and (b)
the Borrower is in full compliance with all of the terms and conditions of the
Credit Agreement after giving effect to this Amendment and no Default or Event
of Default has occurred and is continuing under the Credit Agreement or shall
result after giving effect to this Amendment.
SECTION 4. MISCELLANEOUS.
4.1. The Borrower and certain of its Subsidiaries have heretofore executed
and delivered to the Agent and the Lenders certain of the Collateral Documents.
The Borrower hereby acknowledges and agrees that, notwithstanding the execution
and delivery of this Amendment, the Collateral Documents remain in full force
and effect and the rights and remedies of the Agent and the Lenders thereunder,
the obligations of the Borrower and its Subsidiaries thereunder, and the liens
and security interests created and provided for thereunder remain in full force
and effect and shall not be affected, impaired, or discharged hereby. Nothing
herein contained shall in any manner affect or impair the priority of the liens
and security interests created and provided for by the Collateral Documents as
to the indebtedness which would be secured thereby prior to giving effect to
this Amendment.
4.2. Except as specifically amended herein or waived hereby, the Credit
Agreement shall continue in full force and effect in accordance with its
original terms. Reference to this specific Amendment need not be made in the
Credit Agreement, the Notes, or any other instrument or document executed in
connection therewith, or in any certificate, letter or communication issued or
made pursuant to or with respect to the Credit Agreement, any reference in any
of such items to the Credit Agreement being sufficient to refer to the Credit
Agreement as amended hereby.
4.3. The Borrower agrees to pay all reasonable out-of-pocket costs and
expenses incurred by the Agent and the Lenders in connection with the
preparation, execution and delivery of this Amendment and the documents and
transactions contemplated hereby, including the reasonable fees and expenses of
counsel for the Agent with respect to the foregoing.
4.4. This Amendment may be executed in any number of counterparts, and by
the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. This
Amendment shall be governed by the internal laws of the State of Illinois.
[SIGNATURE PAGES TO FOLLOW]
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This Second Amendment to Second Amended and Restated Credit Agreement is
entered into by the parties hereto as of the date and year first above written.
XXXXXX INDUSTRIAL GROUP, INC.
By
Name
----------------------------------
Title
---------------------------------
Accepted and agreed to:
XXXXXX TRUST AND SAVINGS BANK
By
Name
----------------------------------
Title
---------------------------------
NATIONAL CITY BANK OF THE MIDWEST
By
Name
----------------------------------
Title
---------------------------------
JPMORGAN CHASE BANK, N.A. (formerly
known as Bank One, N.A.)
By
Name
----------------------------------
Title
---------------------------------
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GUARANTORS' ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned hereby acknowledges and agrees that it is a
Guarantor under the terms of Section 11 of the Credit Agreement and, as such,
has executed and delivered certain Collateral Documents pursuant to the Credit
Agreement. The undersigned hereby consent to the Second Amendment to Second
Amended and Restated Credit Agreement as set forth above and agree to the terms
thereof, and the undersigned hereby confirm that their guaranties and the
Collateral Documents executed by them, and all of the obligations of the
undersigned thereunder, remain in full force and effect. The undersigned further
agree that the consent of the undersigned to any further amendments to the
Credit Agreement shall not be required as a result of this consent having been
obtained. The undersigned acknowledge the Lenders are relying on this
acknowledgement and consent in entering into the Second Amendment to Second
Amended and Restated Credit Agreement with the Borrower.
XXXXXX METALCRAFT CO.
By
Name
----------------------------------
Title
---------------------------------
XXXXXX METALCRAFT CO. OF NORTH CAROLINA
By
Name
----------------------------------
Title
---------------------------------
XXXXXX METALCRAFT CO. OF SOUTH CAROLINA
By
Name
----------------------------------
Title
---------------------------------
MID CENTRAL PLASTICS, INC.
By
Name
----------------------------------
Title
---------------------------------
B&W METAL FABRICATORS, INC.
By
Name
----------------------------------
Title
---------------------------------
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EXHIBIT H
XXXXXX INDUSTRIAL GROUP, INC.
BORROWING BASE CERTIFICATE
To: Xxxxxx Trust and Savings Bank, as Agent
under, and the Lenders party to, the
Credit Agreement described below.
Pursuant to the terms of the Credit Agreement dated as of March 26, 2004,
among us (as extended, renewed, amended or restated from time to time, the
"Credit Agreement"), we submit this Borrowing Base Certificate to you and
certify that the information set forth below and on any attachments to this
Certificate is true, correct and complete as of the date of this Certificate.
A. ACCOUNTS RECEIVABLE IN BORROWING BASE
1. Gross accounts receivable ____________________
Less
(a) Ineligible sales ____________________
(b) Owed by an account debtor who is an Affiliate ____________________
(c) Owed by an account debtor who is in an insolvency ____________________
or reorganization proceeding
(d) Credits/allowances ____________________
(e) Unpaid more than 90 days from due date ____________________
(f) Ineligible terms (e.g., due date more than 60 days ____________________
from invoice date)
(g) 25% taint factor ____________________
(h) Otherwise ineligible ____________________
2. Total Deductions (sum of lines A1a - A1h) ____________________
3. Eligible accounts receivable (line A1 minus line A2) ____________________
4. Eligible accounts receivable in Borrowing Base (line A3 ____________________
x .85)
5. Deere/Caterpillar Reserve Amount ____________________
6. Net Borrowing Base value of accounts receivable (line A4 ____________________
minus line A5)
B. INVENTORY IN BORROWING BASE
1. Gross inventory of Finished Goods and Raw Materials ____________________
2. Less
(a) Finished Goods and Raw Materials not located at ____________________
approved locations
(b) Obsolete, slow moving, or not merchantable ____________________
(c) Otherwise ineligible ____________________
2. Total Deductions (sum of lines B2a - B2c above) ____________________
3. Eligible Inventory (line B1 minus line B2) ____________________
4. Eligible Inventory in Borrowing Base before cap (line B3 ____________________
x .60)
5. Inventory cap ($13,000,000) ____________________
6. Eligible Inventory in Borrowing Base (lesser of line B4 ____________________
or line B5)
C. TOTAL BORROWING BASE
1. Line A6 ____________________
2. Line B6(1) ____________________
3. Sum of Lines C1 and C2 ____________________
4. General reserve ____________________
5. Line C3 minus Line C4 (Borrowing Base) ____________________
D. REVOLVING CREDIT ADVANCES
1. Loans ____________________
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(1) If Line B6 would otherwise exceed 60% of the total Borrowing Base, insert
the largest amount which would not exceed 60% of the total Borrowing Base
as shown on Line C5 (as recomputed including such smaller amount on Line
C2).
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2. Letters of Credit ____________________
3. Total Outstandings (line D1 plus D2) ____________________
E. AVAILABLE BORROWING BASE COLLATERAL
(line C5 minus line D3) ____________________
Dated as of this ______ day of __________________.
XXXXXX INDUSTRIAL GROUP, INC.
By
Name
----------------------------------
Title
---------------------------------
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